Payroll processing can be defined as the process involving management of employee payments be it salaries, compensations, etc. This process comprises all the elements that are behind the imbursement of an employee’s salaries. It comprises all the proceedings that a firm has with its employees regularly so that they are paid in a timely manner.

Essentially, there are three steps involved in the payroll process. Pre-payroll, post-payroll and actual payroll processing stage. All three of these stages are further broken down into other steps.

For ensuring success in the payroll process, a firm should incorporate all the required payroll processing system techniques that can facilitate their payroll specialists in their every day work. Preferably, there should be a lot of automation in the payroll process to enhance the efficiency of this task and avoid human-error as much as possible.

Pre-payroll 

Pre-payroll affairs include all the tasks that should be fulfilled before the main payroll process can be initiated. This involves payroll management execution, registration with relevant authorities, and all the documentation that is mandatory for each payroll run.

Payroll

This step is initiated after all the pre-payroll affairs are concluded. The time required to complete this part is dependent on whether a business uses a dedicated payroll software or any other way. This step involves:

• Calculating gross pay
• Calculating payroll taxes
• Finding out total pay
• Inspecting payroll outcomes for preciseness
• Disbursement of payment to employees from the designated payment method

Post-payroll

Providing the par order for the required salaries is an important aspect of the payroll process. Here are some of the duties included in the post-payroll:

• Providing payslips, done either electronically or by paper.
• Presenting and reporting payroll taxes that are withheld.
• Making payroll compliant processes by filing the required reports that require payroll data.
• Managing the payroll records.

Following is a step-by-step process to for performing a payroll

Finding a payroll system

There are three ways to accomplish this step:

• A manual payroll is all about achieving the payroll physically on a paper, particularly spreadsheet.
• This means that you hire a third party accounting firm like Black Ink for all the payroll related tasks like bookkeeping or payroll taxes.
• Payroll software incorporates every payroll function like payroll automation, time tracking, etc.

Formulating a payroll policy

For this you need to go through your labor laws, state laws and federal laws. For instance you should avoid a common FLSA violation that is unpaid overtime and it can happen without you being aware of it. You must also include important payroll aspects in your payroll policy like: pay dates, payment methods, payroll benefits, payroll deductions and withholdings.

Collecting employee data

It’s important to understand the financial information regarding each employee to make sure that you are paying them all the exact amount they are employed on. Additionally, this also includes the subtractions and withholdings. For guidance, you can check out the Form W-4.

Establish a direct deposit

A business owner has the ability to formulate a direct deposit instantly through the firm’s bank account or by a payroll service provider. Direct deposit is a trouble free way for both you and your employees. Direct deposit involves these things:

• Bank name
• Account type
• Bank routing number
• Account number